Your company may provide group term life insurance in your employee benefits package. Even if you don't have any additional life insurance, it's still vital to consider whether that benefit will be enough to cover your expenses. Furthermore, other issues may arise if you depend solely on your employer's insurance coverage.

Employers May Not Offer Enough Life Insurance

The face amount of your policy may not be sufficient, even if the premiums for basic employer-provided life insurance are cheap or nonexistent and additional coverage may be purchased at a minimal cost. There should be at least six times your yearly wage in coverage if you have people who rely on your income.

Experts advise buying insurance equal to 10-12 times your annual earnings. In addition to what their employers give, "most individuals can buy an extra four to six times their income in supplemental coverage,"

Losing Coverage If Your Job Changes

No one can predict when they will require health care, and the same is true of the need for life insurance. Employer-provided life insurance may be terminated if you leave work, are laid off, or are demoted to a lower-paying position.

In that case, the inability to take your health insurance with you might be a major setback. You may be able to switch from a group plan to an individual one, but the premiums will skyrocket. The premiums might be too much to bear if you lose your insurance due to a job loss.

Declining Health Complicates Coverage

Issues can emerge if you need to leave your employment due to health reasons. Jim Saulnier, a certified financial planner in Fort Collins, Colorado, of Jim Saulnier & Associates, cautions against relying primarily or heavily on group insurance, since doing so might result in the loss of life insurance coverage at a time when your loved ones could really use it.

He cautions that even if you can get an insurance policy, it can be too expensive to make it worthwhile. If you can't get life insurance anywhere else than via your company, then even minor health problems might end up limiting your employment options.

Your Plan Doesn't Cover Your Spouse

Although your employer's health insurance plan may cover your spouse, life insurance coverage may not necessarily be included in the benefits package. If it does, the coverage amount may be rather small; $100,000 is a popular number, but it won't go very far if your spouse suddenly passes away.

Saulnier says many people fail to fully cover their wives because they believe that the family will only go into financial trouble in the event of the death of the principal breadwinner.

To this, the customer can respond, "If your [partner] dies on Saturday, are you going back to work on Monday morning?" Have you accrued enough vacation time to cover a prolonged absence? That's where Saulnier comes in.

Employer-Provided Life Insurance May Not Be Cheap

Even if you and your spouse qualify for the maximum life insurance coverage through your employment, it's still a good idea to compare prices to be sure you're getting the best deal possible. If you are young and healthy, you have a higher chance of finding a cheaper plan elsewhere.

The coverage given by your employer typically increases in cost as you get older, in contrast to guaranteed level-premium term life insurance that you may acquire on your own and will cost you the same amount each year for as long as you have the policy. After age 35, the cost of employer-provided health insurance "skyrockets," says Frederick. The cost of a typical policy doubles every five years once an employee turns 50.

Employer-Sponsored Life Insurance With Your Own

Free or low-cost life insurance your company provides is a great benefit, but it's not enough coverage. Similarly, most individuals shouldn't put all their eggs in the supplemental life insurance coverage they may get from their employers. To avoid these issues, you should get a term life insurance policy for yourself.

Term life insurance provides coverage for a certain period and is significantly less expensive than permanent life insurance. Up to 80% of your life insurance premiums may need to come from your pocket to ensure adequate coverage at all times and in all possible scenarios.